Russell Parsons: Will price pressures usher in a new era of direct selling?

The promise of owning the customer journey and not being subject to the vagaries of the third-party relationship is one all suppliers must covet.

What do you think are the “toughest jobs in marketing”? Challenges faced by those working in the energy, tobacco, soft drink and payday lending sectors are often cited. How do you overcome the regulatory and reputational hurdles that most marketers will never face and does this make you a better marketer?

FMCG and retail tend not to be represented, but marketers working in either category could find their jobs are about to get a whole lot harder. Last week, it was revealed that Tesco had played hardball when Unilever tried to pass on a 10% wholesale price increase, an attempt to offset higher import costs and the result of the weak pound since the Brexit vote.

‘Marmite-gate’, as it has been dubbed, was over and done with within a day of news breaking, with both parties taking a hit but both, according to our columnist Mark Ritson, having some cause for celebration. Pressure on prices, however, is not going away.

The ‘hedges’ – essentially insurance policies against currency fluctuations – that retailers have in place giving them licence to discount in the crucial fourth quarter only take them up to the year’s end, according to an analysis in the Guardian. Retailers are faced with higher wholesale prices but the continued expectation from customers of price promotions.

For marketers at retail brands, this puts great pressure on their pricing strategy, and more importantly profit margin. For those at manufacturer brands importing to the UK – clothing, food, electronics and FMCG are likely to be most affected, it adds to the capricious cycle of price fluctuations that have a damaging impact on brand equity and loyalty.

If we are to accept this is a short-term reality for retailers, silver bullet solutions are difficult to find. For suppliers such as Unilever, does the opportunity lie in direct selling? The company splashed out $1bn to acquire Dollar Shave Club earlier this year, an online only subscription service that delivers razors straight to customers’ doorsteps for a fixed monthly price.

While this does not yet offer Unilever the same profit opportunity as cordial relationships with retailers, it does offer control over price, brand and distribution.

The promise of owning the customer journey and not being subject to the vagaries of the third-party relationship is one all suppliers must covet. Pressure on the pound will not usher in a new era but it certainly won’t slow it down.

View more on these topics

Latest from Marketing Week


Access Marketing Week’s wealth of insight, analysis and opinion that will help you do your job better.

Register and receive the best content from the only UK title 100% dedicated to serving marketers' needs.

We’ll ask you just a few questions about what you do and where you work. The more we know about our visitors, the better and more relevant content we can provide for them. And, yes, knowing our audience better helps us find commercial partners too. Don't worry, we won't share your information with other parties, unless you give us permission to do so.

Register now


Our award winning editorial team (PPA Digital Brand of the Year) ask the big questions about the biggest issues on everything from strategy through to execution to help you navigate the fast moving modern marketing landscape.


From the opportunities and challenges of emerging technology to the need for greater effectiveness, from the challenge of measurement to building a marketing team fit for the future, we are your guide.


Information, inspiration and advice from the marketing world and beyond that will help you develop as a marketer and as a leader.

Having problems?

Contact us on +44 (0)20 7292 3703 or email

If you are looking for our Jobs site, please click here